As the calendar turns to a new year, many individuals take this time to review their investment portfolio, rebalance it, take a hard look at weak or failed investments, and look for new investment opportunities. Technology companies should apply a similar technique to their intellectual property portfolios at this time of year. An IP review can be especially important when, as now, so many companies face economic uncertainty. Economic conditions dictate that every dollar spent on IP add long-term value to the business.
Strategies for making an IP portfolio match economic conditions include:
- Cultivate patents having the most value. Do you have patents or applications that cover successful products or services? If so, focus efforts on those items in 2009. Expand patent filings to additional countries if you have a significant market there, and if it’s still possible to do so within filing deadlines. In addition, instead of focusing your patent strategy on a single broad patent for a new product, consider several incremental patents that may achieve allowance from the Patent Office more quickly while collectively covering the important features of the product.
- Prune the losers. Do you have issued patents or pending applications covering a product that was not successful in the market? Do the patents and applications cover an earlier version of aproduct, but not the product’s current version? Did you test a product and then drop plans to sell it? Do you have patents or applications pending in countries where the market is relatively small, and where no competitors have a physical presence? If you answered “yes” to any of these questions, then consider abandoning those patents/applications. They may have little value to the company.
- Search for new business opportunities. If you have a patent that is not relevant to your current or planned products, might other companies who may be interested in those patent rights? Consider approaching companies who are making or selling similar products about licensing or assigning the patent.
- Protect your brand reputation. Review your supplier agreements. Do they ensure that the supplier is responsible for problems that may harm your reputation? Several companies have failed (or at least been severely hurt) this year after a supplier provided a dangerous or low-quality product. Ensure that suppliers indemnify you for the issues that they cause, and obtain insurance if the suppliers cannot indemnify you for the full potential liability. Also, train your employees to quickly report and respond to problems that arise the supply chain before the problems turn into full-blown crises.
- Review your employee and contractor agreements. Have all employees and contractors signed nondisclosure agreements protecting the company’s information, along with information that the company gets from third parties? Have the employees and contractors signed contracts that assign all of their developments to the company? If not, correct those deficiencies in early 2009.
- Educate your employees about IP. Employees who understand IP are those who are most likely to build value for the company. Train them to propose new patent or trademark filings before a product is publicly disclosed. Ensure that they understand the risk of sending memos, emails, or other documents that describe third party IP and how it might relate to company products. Educate computer programmers about the need to document all license terms — including the licenses governing open source code and freeware.
Companies that improve their attention to IP management are likely to emerge stronger in 2009. If you use the economic conditions as an incentive to “rebalance” your IP protection strategy, your company can be one of the resulting stronger ones.